Transcript
1
00:00:00,080 --> 00:00:04,900
They ultimately got a $150,000,000 valuation
company we came in, did all of our work.
2
00:00:04,960 --> 00:00:09,380
We found rebuyers that they never contacted and
got him a 550,000,000 evaluation.
3
00:00:09,439 --> 00:00:09,599
Right?
4
00:00:09,599 --> 00:00:14,384
We, of course, had a big fee trigger above 150
or 200,000,000 So we made three times the
5
00:00:14,384 --> 00:00:17,265
amount of money that we would have made if we
gotten a regular outcome.
6
00:00:17,265 --> 00:00:17,938
So we started getting addicted to this thing
where if you dedicate 510 x, the level of
7
00:00:17,938 --> 00:00:17,977
effort, and you've got 3 x, the level of
expertise, you're gonna wind up getting a
8
00:00:17,977 --> 00:00:18,644
better outcome for the client.
9
00:00:27,640 --> 00:00:31,640
We worked on Revolute, which is kind of a
company that was getting a lot of bad press at
10
00:00:31,640 --> 00:00:32,299
the time.
11
00:00:32,439 --> 00:00:35,899
And, you know, the prior valuation that was
achieved by JP Morgan is $5,000,000,000.
12
00:00:36,280 --> 00:00:36,439
Right?
13
00:00:36,439 --> 00:00:39,000
So we came in a year later, and we're like, the
guys are, okay.
14
00:00:39,000 --> 00:00:40,424
Can you get us 10 or or whatever.
15
00:00:40,424 --> 00:00:43,085
And so we came in and we got 33,000,000,000 for
the company.
16
00:00:43,384 --> 00:00:47,064
We sort of uncorked a lot of things about the
company that, you know, the bankers didn't.
17
00:00:47,064 --> 00:00:48,825
You know, we had built a 20 year model.
18
00:00:48,825 --> 00:00:52,585
We got under an actual belief that this could
be a $1,000,000,000,000 company, and it could
19
00:00:52,585 --> 00:00:56,250
be one of the biggest winners in 3 years later,
here we are today.
20
00:00:56,250 --> 00:00:57,549
They're doing a deal at 45,000,000,000.
21
00:00:58,170 --> 00:01:02,009
I asked you when we last chatted whether PayPal
was sold at the right price.
22
00:01:02,009 --> 00:01:05,370
And you said you would have sold it for 5 or
$10,000,000,000, not the 1,000,000,000 that
23
00:01:05,370 --> 00:01:06,250
I've sold for.
24
00:01:06,250 --> 00:01:08,510
Tell me about how you would have gone about
selling PayPal.
25
00:01:08,805 --> 00:01:09,685
You look at PayPal.
26
00:01:09,685 --> 00:01:11,924
And, again, the joke is like, you have to
paypal mop.
27
00:01:11,924 --> 00:01:15,444
You know, these people that were remembered
from the great things they did to PayPal, Elon
28
00:01:15,444 --> 00:01:16,645
Musk, and so on and so forth.
29
00:01:16,645 --> 00:01:17,145
Right?
30
00:01:25,090 --> 00:01:28,530
Steve, I've been really looking forward to
talking, for now close to a decade.
31
00:01:28,530 --> 00:01:29,409
I've been hearing about you.
32
00:01:29,409 --> 00:01:31,329
And, thank you to Avi Dorfman for the
introduction.
33
00:01:31,329 --> 00:01:32,289
Welcome to the Tennox
34
00:01:32,289 --> 00:01:32,450
Capital LockDown.
35
00:01:32,530 --> 00:01:32,769
Year, and
36
00:01:32,769 --> 00:01:33,890
thanks for having me, David.
37
00:01:33,890 --> 00:01:34,789
It's my pleasure.
38
00:01:34,849 --> 00:01:38,450
So you run really the number one fintech
banking platform in the world.
39
00:01:38,450 --> 00:01:40,265
How did you go about star FT partners?
40
00:01:40,504 --> 00:01:40,584
I
41
00:01:40,584 --> 00:01:44,664
guess the background is I was at Goldman Sachs
for a bunch of years from 95 to 02 and their
42
00:01:44,664 --> 00:01:49,304
fig group eventually ran or co ran the fintech
department there and then, moved out to the
43
00:01:49,304 --> 00:01:49,784
west coast.
44
00:01:49,784 --> 00:01:56,520
And so in 2, at the, ripe age of thirty two, I
bolted and started FT Partners kind of thinking
45
00:01:56,520 --> 00:01:59,799
and believing that, you know, the world of
fintech would actually be big.
46
00:01:59,799 --> 00:02:00,040
Right?
47
00:02:00,040 --> 00:02:02,600
And so but that was not something people
thought that much of.
48
00:02:02,600 --> 00:02:04,439
And, you know, too, you know, that was 22 years
ago.
49
00:02:04,439 --> 00:02:06,380
So I've been doing it for quite a while.
50
00:02:06,484 --> 00:02:11,049
When you started at 32, were you running away
from the corporate banking route, or were you
51
00:02:11,049 --> 00:02:11,060
going towards building something new?
52
00:02:11,060 --> 00:02:11,073
I think it was a combination.
53
00:02:11,073 --> 00:02:11,093
You get your training grounds at the bigger
firms.
54
00:02:11,093 --> 00:02:12,584
A lot of times, and you just kinda wanna do
something smaller, Rush, where you can
55
00:02:19,810 --> 00:02:21,729
see the impact of what you're doing more
directly.
56
00:02:21,729 --> 00:02:24,769
You know, I mean, you're part of such a big
giant machine like a Goldman Sachs.
57
00:02:24,769 --> 00:02:27,329
It's hard to really see the impact of what
you're doing sometimes.
58
00:02:27,329 --> 00:02:30,930
And I think, look, from a very young age, I was
doing entrepreneurial things.
59
00:02:30,930 --> 00:02:34,724
I didn't even know it at the time, but I was,
like, painted rocks put people's addresses on
60
00:02:34,724 --> 00:02:37,525
them and sold them to the old lady and made
five bucks.
61
00:02:37,525 --> 00:02:42,084
And I I did my time at GE and then Goldman
Sachs, and I think I'd had enough of the big
62
00:02:42,084 --> 00:02:43,764
firms and wanted to go do it on my own.
63
00:02:43,764 --> 00:02:45,960
So, yeah, it's never looked back.
64
00:02:46,120 --> 00:02:51,000
It's one thing leaving Goldman Sachs to go to
JP Morgan or Morgan Stanley, but you left
65
00:02:51,000 --> 00:02:52,280
Goldman Sachs to start a new firm.
66
00:02:52,280 --> 00:02:52,920
Did people think you were crazy?
67
00:02:52,920 --> 00:02:54,300
I literally thought I was crazy.
68
00:02:54,439 --> 00:02:56,520
Like, literally, they're like, what are you
doing?
69
00:02:56,520 --> 00:02:57,960
Like, it makes literally no sense.
70
00:02:57,960 --> 00:02:58,680
And that's it too.
71
00:02:58,680 --> 00:02:58,840
Yeah.
72
00:02:58,840 --> 00:02:59,960
Anyone's torn on my end.
73
00:02:59,960 --> 00:03:01,754
They're like, No one's ever really done that
before.
74
00:03:01,754 --> 00:03:01,995
You know?
75
00:03:01,995 --> 00:03:03,115
Like, it was, like, unheard of.
76
00:03:03,115 --> 00:03:04,715
You know, like, you'd have to be, like, a very
77
00:03:04,955 --> 00:03:05,514
Especially after that.
78
00:03:05,514 --> 00:03:05,594
Yeah.
79
00:03:05,594 --> 00:03:09,435
I mean, maybe if you're, like, running a
gigantic apartment and you're, like, running in
80
00:03:09,435 --> 00:03:14,314
your 55, you know, that's when, like, Corella,
Washington from Pirrella, Washington and the
81
00:03:14,314 --> 00:03:19,000
big banks, he went on started his own thing,
and Ken Mollis left, you know, UBS when he was,
82
00:03:19,000 --> 00:03:20,680
like, 55 or, you know, whatever.
83
00:03:20,680 --> 00:03:23,080
And and they they've already got their big
career going.
84
00:03:23,080 --> 00:03:23,742
So this was, way
85
00:03:23,742 --> 00:03:23,777
more humble beginnings.
86
00:03:23,777 --> 00:03:23,845
I think I remember incorporating the
87
00:03:23,845 --> 00:03:32,134
business for $99 using an online service called
company corporation.com, and I went to what was
88
00:03:32,134 --> 00:03:37,175
then Kinko's to get my business cards, and I
worked out of my tiny kitchen table and my 2
89
00:03:37,175 --> 00:03:40,326
bedroom apartment in San Francisco for the
better part of the year with
90
00:03:40,326 --> 00:03:40,407
interns in the early days.
91
00:03:40,407 --> 00:03:40,502
It wasn't until a couple of
92
00:03:40,502 --> 00:03:41,365
years that we knew it was gonna really work.
93
00:03:45,169 --> 00:03:49,330
You made a key decision at inception to focus
exclusively on fintech.
94
00:03:49,330 --> 00:03:52,689
Walk me through that decision making to focus
on such a niche at the time.
95
00:03:52,689 --> 00:03:53,969
I mean, not only was it a niche.
96
00:03:53,969 --> 00:03:54,449
It was a niche.
97
00:03:54,449 --> 00:03:58,094
I don't wanna seem to care that much about, and
the market was completely decimated It was
98
00:03:58,094 --> 00:04:00,275
right after the dot bomb right after 9:11.
99
00:04:00,495 --> 00:04:04,355
It was an environment where there's no deals at
all, let alone in tech or fintech.
100
00:04:04,495 --> 00:04:06,254
So it was quite a contrarian thing to do.
101
00:04:06,254 --> 00:04:09,375
And I'd like to say it was like a genius
decision or whatever, but it was it was it
102
00:04:09,375 --> 00:04:10,175
kinda what I knew.
103
00:04:10,175 --> 00:04:11,694
And I think life is a little bit of
serendipity.
104
00:04:11,694 --> 00:04:14,650
I mean, had I been energy and utility group at
Colvin.
105
00:04:14,789 --> 00:04:18,069
You know, maybe I wouldn't have done it or
maybe I've done it and failed in the dotcom
106
00:04:18,069 --> 00:04:18,310
world.
107
00:04:18,310 --> 00:04:21,350
It became famous later when there was PayPal
and a few other ones.
108
00:04:21,350 --> 00:04:21,829
Right?
109
00:04:21,829 --> 00:04:23,430
But, largely, they all failed.
110
00:04:23,430 --> 00:04:26,870
So, actually, it seemed them all failed and
say, look, and it's a little bit of the story
111
00:04:26,870 --> 00:04:31,415
today 20 years later where I've seen a lot of
fintech companies fail, but the TAMs that the
112
00:04:31,415 --> 00:04:34,214
market sizes that they're disrupting are still
just
113
00:04:34,214 --> 00:04:34,225
as big.
114
00:04:34,225 --> 00:04:34,254
The problems are just as big.
115
00:04:34,254 --> 00:04:34,290
They just didn't have the right solution.
116
00:04:34,290 --> 00:04:34,324
I make the simple analogy to, like,
117
00:04:34,324 --> 00:04:34,375
the old, you know, Web Band back in 99.
118
00:04:34,375 --> 00:04:45,439
It completely blew up even though Goldman Sachs
put a hundred money bucks instead of everyone
119
00:04:45,439 --> 00:04:45,759
else.
120
00:04:45,759 --> 00:04:49,360
It's like, because their idea was let's deliver
groceries to your house, but in order to do
121
00:04:49,360 --> 00:04:52,960
that, let's get refrigerated trucks, giant
warehouses, and all this kind of stuff.
122
00:04:52,960 --> 00:04:54,420
And it just didn't work economically.
123
00:04:54,480 --> 00:04:56,319
Some things just take time to get the model
right.
124
00:04:56,319 --> 00:05:00,675
I think FinTech is one of the things where the
TAMs and the broken parts of the world are
125
00:05:00,675 --> 00:05:01,235
still broken.
126
00:05:01,235 --> 00:05:04,595
It just someone needs to come along and hack
away at the one thing that's gonna make that
127
00:05:04,595 --> 00:05:04,714
work.
128
00:05:04,714 --> 00:05:08,194
So but it was at a moment in time where I saw
all these failures, but I I realized the
129
00:05:08,194 --> 00:05:09,235
problem was still there.
130
00:05:09,235 --> 00:05:11,014
So I knew the companies hadn't created.
131
00:05:11,240 --> 00:05:13,160
Sometimes having a big pain isn't enough.
132
00:05:13,160 --> 00:05:16,605
You need to have the right solution with the
right market and the right time in the market.
133
00:05:16,605 --> 00:05:16,610
Yep.
134
00:05:16,610 --> 00:05:16,636
You regularly go into pitches.
135
00:05:16,636 --> 00:05:16,687
It's Morgan Stanley and the Goldman Sachs and
Feet partners.
136
00:05:16,687 --> 00:05:16,713
How do you get in
137
00:05:16,713 --> 00:05:16,723
these rooms?
138
00:05:16,723 --> 00:05:21,339
And what is your differentiation against the
larger banks?
139
00:05:26,745 --> 00:05:28,504
I could go on for a long time on this one.
140
00:05:28,504 --> 00:05:31,404
The number 1, I mean, we're entrepreneurial
people working with entrepreneurs.
141
00:05:31,464 --> 00:05:33,273
So we generally work with private companies
that are
142
00:05:33,273 --> 00:05:33,336
on a growth journey.
143
00:05:33,336 --> 00:05:33,353
Right?
144
00:05:33,353 --> 00:05:33,528
So the same ones that Sequoia and Teresa or,
you know,
145
00:05:33,528 --> 00:05:33,641
co 2 or whoever are going after.
146
00:05:33,641 --> 00:05:37,964
They're the ones we're going after.
147
00:05:42,029 --> 00:05:43,870
You know, it's not the older school.
148
00:05:43,870 --> 00:05:44,269
More boring.
149
00:05:44,269 --> 00:05:48,110
Public companies are growing 6% and trading at
eight times, you know, EBITDA.
150
00:05:48,110 --> 00:05:50,350
And they're fine too, but we tend to go with
the smaller.
151
00:05:50,350 --> 00:05:54,290
So they like the entrepreneurial side of what
we do, and it matches up with what they do.
152
00:05:54,350 --> 00:05:56,589
I think that's one sliver of it.
153
00:05:56,589 --> 00:05:58,740
I think the biggest liver is look.
154
00:05:58,740 --> 00:05:58,777
When I was at Goldman, I was shocked at the
level of quasi mediocrity that I saw across the
155
00:05:58,777 --> 00:05:58,779
deals.
156
00:05:58,779 --> 00:05:58,781
Right?
157
00:05:58,781 --> 00:05:58,797
And everything was based upon high level
analysis.
158
00:05:58,797 --> 00:05:58,805
Everything was based upon.
159
00:05:58,805 --> 00:05:58,814
Let's get the deal done.
160
00:05:58,814 --> 00:06:16,210
The debt understanding that the bankers out of
of the client itself were pretty thin.
161
00:06:16,210 --> 00:06:16,626
And so when I started FT
162
00:06:16,626 --> 00:06:16,673
Partners, the one thing I looked at actually
was Goldman's IPO.
163
00:06:16,673 --> 00:06:16,732
When Goldman IPO was going on, they had, like,
fifty people working on it.
164
00:06:16,732 --> 00:06:16,736
Right?
165
00:06:16,736 --> 00:06:17,589
And they were going super deep on their own
IPO.
166
00:06:26,745 --> 00:06:29,704
And I was like, oh, so that's what client
service looks like.
167
00:06:29,704 --> 00:06:30,824
I've never seen it before.
168
00:06:30,824 --> 00:06:31,064
You know?
169
00:06:31,064 --> 00:06:34,345
But when I saw them doing it on their own
company, I was pretty blown away.
170
00:06:34,345 --> 00:06:38,204
And so I said there's a next level of banking
that can be done.
171
00:06:38,204 --> 00:06:42,580
And I think it can only be done in a niche by
niche basis by people that really understand
172
00:06:42,580 --> 00:06:45,860
the niche and really commit themselves
permanently to that niche so you can accumulate
173
00:06:45,860 --> 00:06:46,680
lots of knowledge.
174
00:06:46,980 --> 00:06:48,835
Some of our first assignments, we didn't have
other assignments to work on.
175
00:06:48,835 --> 00:06:48,838
Right?
176
00:06:48,838 --> 00:06:48,866
So we were able to go super deep with the
clients.
177
00:06:48,866 --> 00:06:48,884
It's something I've always wanted to do.
178
00:06:48,884 --> 00:06:49,650
Never at the time to do a Coleman.
179
00:06:56,204 --> 00:06:57,564
So we would learn the tech stack.
180
00:06:57,564 --> 00:06:58,925
We'd learn the customer service center.
181
00:06:58,925 --> 00:06:59,964
We'd learn their market.
182
00:06:59,964 --> 00:07:00,764
We'd study their competitors.
183
00:07:00,764 --> 00:07:01,884
We'd look at the pricing trends.
184
00:07:01,884 --> 00:07:05,245
We'd look at the valuations through a whole
different lens that other people would tend to
185
00:07:05,245 --> 00:07:05,404
look.
186
00:07:05,404 --> 00:07:05,904
Right?
187
00:07:06,044 --> 00:07:10,604
And we end up getting hired by a company called
Link Systems in Oak Ray and up selling at No
188
00:07:10,604 --> 00:07:11,104
Four.
189
00:07:11,319 --> 00:07:15,160
And this is a company that had been previously
been banked by another very large bank,
190
00:07:15,160 --> 00:07:16,060
remained nameless.
191
00:07:16,279 --> 00:07:20,360
And they ultimately got, like, a $150,000,000
valuation with the company.
192
00:07:20,360 --> 00:07:22,139
We came in, did all of our work.
193
00:07:22,279 --> 00:07:24,379
We found rebuyers that they never contacted.
194
00:07:24,754 --> 00:07:25,316
Got him a 550
195
00:07:25,316 --> 00:07:25,319
my evaluation.
196
00:07:25,319 --> 00:07:25,321
Right?
197
00:07:25,321 --> 00:07:25,341
We, of course, had a big fee trigger above a
150 or 200,000,000.
198
00:07:25,341 --> 00:07:25,370
So we made three times the amount of money that
we would have made if we gotten a regular
199
00:07:25,370 --> 00:07:25,371
outcome.
200
00:07:25,371 --> 00:07:25,894
So we started getting addicted to this thing
where if you dedicate 510, the level of
201
00:07:31,314 --> 00:07:44,060
effort, and you've got 3x level expertise,
you're gonna wind up getting a better outcome
202
00:07:44,060 --> 00:07:44,699
for the client.
203
00:07:44,699 --> 00:07:46,959
You say you're only as good as your your last
deals.
204
00:07:47,100 --> 00:07:51,419
A number of years ago, we worked on revolut,
which is kind of a company that was getting a
205
00:07:51,419 --> 00:07:52,720
lot of bad press at the time.
206
00:07:52,884 --> 00:07:56,504
And, you know, the prior evaluation that was
achieved by JP Morgan is $5,000,000,000.
207
00:07:56,884 --> 00:07:57,045
Right?
208
00:07:57,045 --> 00:08:00,084
So we came in a year later and we're like, the
guy's like, hey.
209
00:08:00,084 --> 00:08:01,524
Can you get us 10 or 12 or whatever?
210
00:08:01,524 --> 00:08:07,060
And so we came in, and we got 33,000,000,000
for the company And we sort of uncorked a lot
211
00:08:07,060 --> 00:08:09,220
of things about the company that the other
bankers didn't.
212
00:08:09,220 --> 00:08:10,899
You know, we built a 20 year model.
213
00:08:10,899 --> 00:08:14,660
We got under an actual belief that this could
be a $1,000,000,000,000 company, and it could
214
00:08:14,660 --> 00:08:16,759
be one of the biggest winners in fintech.
215
00:08:17,144 --> 00:08:19,305
You go 3 years later, here we are today.
216
00:08:19,305 --> 00:08:20,685
They're doing a deal at 45,000,000,000.
217
00:08:21,144 --> 00:08:24,904
I personally think it's worth double that, and
they're gonna be bigger than Stripe and many
218
00:08:24,904 --> 00:08:25,225
other companies.
219
00:08:25,225 --> 00:08:25,865
So we get in.
220
00:08:25,865 --> 00:08:29,625
We see these companies who may help them get
the value they deserve by going deep,
221
00:08:29,625 --> 00:08:31,865
partnering with them, and helping them achieve
great things.
222
00:08:31,865 --> 00:08:36,139
So It's just a level of depth and actually
caring a lot about the outcome and caring about
223
00:08:36,139 --> 00:08:39,500
the founders, caring about the founders,
employees, and their shareholders, and try to
224
00:08:39,500 --> 00:08:40,720
get people the best outcome.
225
00:08:40,779 --> 00:08:43,179
It isn't always about getting the best
valuation at all.
226
00:08:43,179 --> 00:08:47,144
I mean, a lot of it's what's the right fit,
what's the right culture, and there's many more
227
00:08:47,144 --> 00:08:48,184
important things in evaluation.
228
00:08:48,184 --> 00:08:50,131
And we wanna make sure investors get great
returns too.
229
00:08:50,131 --> 00:08:52,985
So we're not gonna represent a company and pop
up the value.
230
00:08:52,985 --> 00:08:56,024
If it's not something we feel really strong
about on the positive side.
231
00:08:56,024 --> 00:08:59,769
So, you know, for me, it's still to create an
ecosystem where everybody can win, but or the
232
00:08:59,769 --> 00:09:02,110
company shouldn't be a losers in the equation
either.
233
00:09:02,169 --> 00:09:06,269
You mentioned that you were able to get a
$550,000,000 valuation for a $150,000,000
234
00:09:06,889 --> 00:09:08,490
company, and you got triple the fees.
235
00:09:08,490 --> 00:09:10,889
Presumably, the large banks also like to make
fees.
236
00:09:10,889 --> 00:09:14,659
What keeps them from being able to offer the
same level of service and get the same level of
237
00:09:14,659 --> 00:09:15,159
economics?
238
00:09:15,514 --> 00:09:18,475
What keeps the army from being like the navy
seals.
239
00:09:18,475 --> 00:09:18,875
Right?
240
00:09:18,875 --> 00:09:19,037
You know,
241
00:09:19,037 --> 00:09:19,049
you can't train everyone.
242
00:09:19,049 --> 00:09:19,077
You can't have that elite force in that wider
spectrum.
243
00:09:19,077 --> 00:09:19,865
But we're more super proactive, very founder
friendly, very much an advocate for the seller,
244
00:09:29,870 --> 00:09:33,870
we're not trying to get these from the big buy
side of the world or the big buyers.
245
00:09:33,870 --> 00:09:38,029
We've never once been hired by Visa,
Mastercard, Discover, Capital 1.
246
00:09:38,029 --> 00:09:39,730
We're always on the side of the sellers.
247
00:09:39,870 --> 00:09:42,589
We can be very loyal and uncomflicted in that
regard.
248
00:09:42,589 --> 00:09:46,945
We're not trying to win business from Hero
price or fidelity where Goldman's trying to get
249
00:09:46,945 --> 00:09:49,120
them to buy every single IPO on the street and
getting commissions spend on trading and all
250
00:09:49,120 --> 00:09:49,129
sorts of other stuff.
251
00:09:49,129 --> 00:09:49,142
So the strictly independent device matters.
252
00:09:49,142 --> 00:09:49,184
And when I was at Goldman, I was trying to do
what I'm talking about when we're doing an
253
00:09:49,184 --> 00:10:00,410
empty partners I was, like, slapped on the
wrist.
254
00:10:00,410 --> 00:10:02,649
You know, Steve, you're you're being too much
of a zealot.
255
00:10:02,649 --> 00:10:03,049
You're working.
256
00:10:03,049 --> 00:10:04,110
You're trying too hard.
257
00:10:04,570 --> 00:10:07,129
You need to spread yourself thin or you need to
work on bigger deals.
258
00:10:07,129 --> 00:10:10,090
Why are you spending so much time trying to get
such a great outcome for this particular
259
00:10:10,090 --> 00:10:10,330
company?
260
00:10:10,330 --> 00:10:13,389
And these things were said to me, it was, like,
just get the effing deal done.
261
00:10:13,584 --> 00:10:17,664
Was, you know, the mantra that I heard as
opposed to get it done right, and we're sort of
262
00:10:17,664 --> 00:10:20,164
measured twice, cut once, get it done right.
263
00:10:20,225 --> 00:10:24,865
And we become, you know, as well known for
generally clients not to do deals than to do
264
00:10:24,865 --> 00:10:26,909
them because it don't feel like it's a fair
deal.
265
00:10:26,909 --> 00:10:28,190
Like having negotiating leverage.
266
00:10:28,190 --> 00:10:30,269
We like having clients that don't have to do
deals.
267
00:10:30,269 --> 00:10:30,669
Right?
268
00:10:30,669 --> 00:10:34,750
If we have a client that absolutely has to do a
deal, then we'll find a way to get the deal
269
00:10:34,750 --> 00:10:34,990
done well.
270
00:10:34,990 --> 00:10:37,870
But if they don't have to do a deal, you know,
then you've got the ultimate leverage.
271
00:10:37,870 --> 00:10:37,949
Right?
272
00:10:37,949 --> 00:10:41,565
That's why companies that are profitable that
are growing, they can always say no.
273
00:10:41,644 --> 00:10:44,524
And a lot of times, the bankers put pressure on
you to get a deal done.
274
00:10:44,524 --> 00:10:48,924
A lot of bankers are compensated annually based
upon how much revenue they bring in that year.
275
00:10:48,924 --> 00:10:52,056
So it was a huge conflict in the compensation
model where they're very much motivated a lot
276
00:10:52,056 --> 00:10:53,034
of times to bring a deal in sooner rather than
later, close deal sooner rather than later.
277
00:10:57,059 --> 00:10:57,960
Fees lower.
278
00:10:58,019 --> 00:10:59,779
So we're not motivated that way.
279
00:10:59,779 --> 00:11:01,940
We're more used to term out of Goldman's
playbook, you know,
280
00:11:01,940 --> 00:11:02,001
long term greedy, but you have to really be
long term thinkers.
281
00:11:02,001 --> 00:11:02,079
And we've got clients that we won in 2008 or
2009 that are still clients
282
00:11:02,079 --> 00:11:14,074
today where we've done 10 transactions who
bought the way could have sold 10 years ago for
283
00:11:14,074 --> 00:11:16,615
a $100,000,000 are now worth 1,000,000,000 of
dollars.
284
00:11:16,674 --> 00:11:18,674
So, you know, they're running around the world
saying, hey.
285
00:11:18,674 --> 00:11:19,914
They've got companies called Avid Exchange.
286
00:11:19,914 --> 00:11:22,754
You know, I'm talking about was written up in
the Wall Street Journal article that came out
287
00:11:22,754 --> 00:11:24,269
on us where the the CEO said, look.
288
00:11:24,269 --> 00:11:26,830
Know, Steve's the one that told us, and FTE is
the one that told us not to sell.
289
00:11:26,830 --> 00:11:29,790
Steve was always a zell it for keeping the
company private, keeping the company going,
290
00:11:29,790 --> 00:11:32,990
take it public someday and become a
$10,000,000,000 company down the road.
291
00:11:32,990 --> 00:11:37,070
So telling someone and advice that people not
to do certain deals, you know, can add a lot of
292
00:11:37,070 --> 00:11:38,684
value and you get paid on it later.
293
00:11:38,764 --> 00:11:41,904
We're still making peace off of out of exchange
10, 12 years later.
294
00:11:41,965 --> 00:11:43,729
And I get why you as the founder at F.
295
00:11:43,729 --> 00:11:43,732
D.
296
00:11:43,732 --> 00:11:43,771
Partners would be incentivized to push business
down the road to do the right decision to
297
00:11:43,771 --> 00:11:44,384
company gross, how do you incentivize your
employees to to have the same way of operating?
298
00:11:53,690 --> 00:11:54,089
Easy.
299
00:11:54,089 --> 00:11:57,529
I mean, I think the the one measure we have,
and I talk about this all the time at the firm
300
00:11:57,529 --> 00:11:58,329
is client happiness.
301
00:11:58,329 --> 00:12:01,529
And that's a basic premise, right, but we
literally have a thing where every single
302
00:12:01,529 --> 00:12:05,649
person on every single team can click a button
once a week about what the perception is the
303
00:12:05,649 --> 00:12:06,049
client happiness.
304
00:12:06,049 --> 00:12:09,345
If it's not, like, 10 out of 10, know, we're
doing something about it.
305
00:12:09,345 --> 00:12:09,665
Right?
306
00:12:09,665 --> 00:12:11,985
And so that's how you measure people in a weird
way.
307
00:12:11,985 --> 00:12:12,305
Right?
308
00:12:12,305 --> 00:12:13,345
The revenues will come.
309
00:12:13,345 --> 00:12:13,504
Right?
310
00:12:13,504 --> 00:12:16,565
And when we've made big profits, we've paid big
bonuses.
311
00:12:16,625 --> 00:12:16,785
Right?
312
00:12:16,785 --> 00:12:17,004
And so people have
313
00:12:17,004 --> 00:12:17,264
to have a trust in the founder of the company,
the person that's
314
00:12:17,264 --> 00:12:26,639
actually deciding on all the bonuses, that if
it's not short term thinking that that's being
315
00:12:26,639 --> 00:12:30,879
a reward, it's long term thinking that's being
rewarded, but you gotta reward people for those
316
00:12:30,879 --> 00:12:31,379
activities.
317
00:12:31,440 --> 00:12:31,840
Right?
318
00:12:31,840 --> 00:12:35,840
So when we do have a big outcome in 5 years
from now, I gotta reward that people live there
319
00:12:35,840 --> 00:12:36,480
along the way.
320
00:12:36,480 --> 00:12:36,730
Right?
321
00:12:36,730 --> 00:12:39,274
So that's that's something that we've done over
and over again.
322
00:12:39,274 --> 00:12:44,475
So most of our senior people have been here 10,
some 20 years because of the way we, you know,
323
00:12:44,475 --> 00:12:44,875
think.
324
00:12:44,875 --> 00:12:46,875
But a lot of times, yeah, we'll work on deals.
325
00:12:46,875 --> 00:12:51,450
And sometimes people say, why are you guys
working on a $25,000,000 capital raise for this
326
00:12:51,610 --> 00:12:52,889
young AI company.
327
00:12:52,889 --> 00:12:57,070
It's like, well, we think it's gonna be a 5 or
$10,000,000,000 deal in the future.
328
00:12:57,129 --> 00:12:57,370
Right?
329
00:12:57,370 --> 00:13:01,529
And sometimes you'll have a good junior banker,
maybe a a director, younger MD, that will
330
00:13:01,529 --> 00:13:05,129
really bond with that MD and kind of work with
them over 10 years, and those companies are
331
00:13:05,129 --> 00:13:06,410
super loyal down the road.
332
00:13:06,410 --> 00:13:11,375
So for us, it's been, important to get the
culture or where everyone's addicted to the
333
00:13:11,375 --> 00:13:12,355
long term thinking.
334
00:13:12,414 --> 00:13:13,615
It's very hard, though.
335
00:13:13,615 --> 00:13:14,174
Think about it.
336
00:13:14,174 --> 00:13:15,634
I make this analogy sometimes.
337
00:13:15,774 --> 00:13:19,565
A lot of companies are doing a licensed
software where they get all the fees upfront.
338
00:13:19,679 --> 00:13:22,330
And then they were trying to transition to more
subscription where it's like
339
00:13:22,330 --> 00:13:22,375
lower fees, lower subscription revenues, but
more recurring.
340
00:13:22,375 --> 00:13:22,379
Right?
341
00:13:22,379 --> 00:13:22,429
And so a little bit like the banking thing
where
342
00:13:22,429 --> 00:13:33,975
if I'm a bank where I've always paid for short
term profits, I can never really shift to long
343
00:13:33,975 --> 00:13:37,414
term, obviously, then there's a period of time
where I have no profits, right, versus if we've
344
00:13:37,414 --> 00:13:37,632
been long term since 2003, then the decisions
we made to be a long term back in 2003, we're
345
00:13:37,632 --> 00:13:37,648
paying off in 2 1011,112,014.
346
00:13:37,648 --> 00:13:51,220
So we've now got whole ecosystem going on where
half our revenues that are coming in this year
347
00:13:51,220 --> 00:13:52,179
for deals we did.
348
00:13:52,179 --> 00:13:54,259
It started relationships 5 or 6 or 7 years ago.
349
00:13:54,259 --> 00:13:57,699
We have a one of our biggest fees of all times
is coming in right now and the company we're,
350
00:13:57,699 --> 00:14:02,084
hopefully, signing a deal out in the next week
or 2 where It's like pretty phenomenal outcome
351
00:14:02,084 --> 00:14:05,524
client, but, like, we could have sold that
company for a $100,000,000 3 years ago.
352
00:14:05,524 --> 00:14:09,204
Now it's gonna be, you know, 100 of 1,000,000
of dollars a couple of years later, and we're
353
00:14:09,204 --> 00:14:10,164
gonna make a lot of money.
354
00:14:10,164 --> 00:14:13,125
And you have to be doing that for a long time
for everyone to kinda get in the culture and
355
00:14:13,125 --> 00:14:13,764
have it pay off.
356
00:14:13,764 --> 00:14:16,649
So that's long term thinking is super critical.
357
00:14:16,870 --> 00:14:20,970
You mentioned when we were talking last that it
took you 10 years to really start compounding
358
00:14:21,029 --> 00:14:23,769
returns for your business another 12 years of
harvesting.
359
00:14:24,149 --> 00:14:24,710
Tell me about that.
360
00:14:24,710 --> 00:14:24,950
Yeah.
361
00:14:24,950 --> 00:14:28,470
Well, the 1st 10 years, you know, we were very
small, right, and it was kinda where we were
362
00:14:28,470 --> 00:14:30,174
figuring out how to build a business.
363
00:14:30,174 --> 00:14:32,254
You know, we're getting 1 or 2 deals on a year.
364
00:14:32,254 --> 00:14:36,654
It was great in the early, early days, and we
wanted to keep the quality very high.
365
00:14:36,654 --> 00:14:37,794
So we stayed small.
366
00:14:38,014 --> 00:14:42,825
And what I realized over the course of time was
and, really, I was the only real MD for the
367
00:14:42,825 --> 00:14:45,720
first 7, 8, 9, 10 years, and we had a lot of
junior people.
368
00:14:45,720 --> 00:14:48,360
And it was mostly, kind of a cottage kind of a
thing.
369
00:14:48,360 --> 00:14:51,879
And then I started seeing the the results
getting better and better.
370
00:14:51,879 --> 00:14:55,575
The depth that we were going was getting
deeper, but as I was able to hire more people,
371
00:14:55,654 --> 00:14:59,894
and the results were getting better in and out
of the financial crisis, you know, global
372
00:14:59,894 --> 00:15:02,059
financial crisis are started seeing that, you
know,
373
00:15:02,059 --> 00:15:02,099
our phone was starting to ring off the hook.
374
00:15:02,099 --> 00:15:02,166
And despite we never made any outbound calls
about winning business with people would hear
375
00:15:02,166 --> 00:15:02,170
about
376
00:15:02,170 --> 00:15:12,110
the work that we were doing, and we were kinda
going from sector to sector to sector to sector
377
00:15:12,110 --> 00:15:13,470
with record breaking
378
00:15:13,470 --> 00:15:13,625
transactions and happy clients referring us all
over the place.
379
00:15:13,625 --> 00:15:13,905
And that also jumped over into London, UK, and,
you know, sort of parts of of Western Europe.
380
00:15:13,905 --> 00:15:13,936
And so
381
00:15:13,936 --> 00:15:28,445
it was really kind of in that 2000 12 to 2022
decade where the 2nd
382
00:15:28,445 --> 00:15:28,489
decade, if you will, where we really started
institutionalizing things.
383
00:15:28,489 --> 00:15:28,516
We built out our HR function.
384
00:15:28,516 --> 00:15:28,542
We built our finance and accounting.
385
00:15:28,542 --> 00:15:28,551
We built
386
00:15:28,551 --> 00:15:28,565
the back office.
387
00:15:28,565 --> 00:15:40,090
We used to use Salesforce, and now we built our
own proprietary deal flow platform, which we're
388
00:15:40,090 --> 00:15:42,590
now applying AI to other things with our own
developers.
389
00:15:42,889 --> 00:15:46,338
We decided to hire a team of data scientists to
do a deeper level of work on the data
390
00:15:46,338 --> 00:15:46,347
analytics.
391
00:15:46,347 --> 00:15:46,463
We decided to build out a mini McKinsey
internally for strategy and the
392
00:15:46,463 --> 00:15:46,889
long term thinking and TAM development and
market mapping and things like that.
393
00:15:46,889 --> 00:15:57,634
And have a million plus or minus people that
are reading our our work every month, and that
394
00:15:57,634 --> 00:16:02,035
doesn't count who they forward it to because
it's all free at f tpartners.com or Twitter at
395
00:16:02,035 --> 00:16:02,695
f tpartners.
396
00:16:02,754 --> 00:16:04,514
But we we build out all these other functions.
397
00:16:04,514 --> 00:16:07,735
Now we have operating executives, you know,
with the founder of merchantee solutions,
398
00:16:07,879 --> 00:16:08,600
helping us out.
399
00:16:08,600 --> 00:16:12,200
We have the founder of Op Edge who ran a big
part in Northern Trust as an operating
400
00:16:12,200 --> 00:16:12,700
executive.
401
00:16:12,839 --> 00:16:17,179
We've now built out, you know, 5 or 6 different
functions of the company that don't even exist
402
00:16:17,240 --> 00:16:18,360
at other big banks.
403
00:16:18,360 --> 00:16:22,642
I've kinda realized it's it can be impossible
to do this like, a Goldman or lazard scale,
404
00:16:22,642 --> 00:16:23,786
even lazards and molysis.
405
00:16:23,786 --> 00:16:27,793
It's really just a bunch of silos of individual
bankers doing their own thing.
406
00:16:27,793 --> 00:16:28,937
And god bless them.
407
00:16:29,224 --> 00:16:31,799
It works just fine until a person x retires.
408
00:16:31,799 --> 00:16:35,519
You know, we used to compete with Evercore and
the stock had changed.
409
00:16:35,679 --> 00:16:39,440
Technology business when when Jane Wheeler
retired from there, that they pretty much
410
00:16:39,440 --> 00:16:42,879
vanished off the face of planet and that big
sliver of fintech.
411
00:16:42,879 --> 00:16:45,759
We build out the institutional side of our
business.
412
00:16:45,759 --> 00:16:46,660
We built all the verticals.
413
00:16:46,660 --> 00:16:47,779
We built all the geographies.
414
00:16:47,840 --> 00:16:50,644
So we're not covering 10 distinct verticals
within fintech.
415
00:16:50,644 --> 00:16:55,044
That was really the 2nd decade building all
that stuff out, and the business flowed in, and
416
00:16:55,044 --> 00:16:58,884
we were able to turn down a lot of business and
really take on the things that we thought made
417
00:16:58,884 --> 00:17:02,665
sense that we could do a high quality job on,
and and it's still happening to this day.
418
00:17:03,240 --> 00:17:03,740
Congratulations.
419
00:17:04,039 --> 00:17:05,820
10 x capital podcast listeners.
420
00:17:05,880 --> 00:17:06,200
We have
421
00:17:06,200 --> 00:17:06,273
officially cracked the top 10 rankings in the
United States for investing.
422
00:17:06,273 --> 00:17:06,323
Please help this podcast continue climbing up
in
423
00:17:06,323 --> 00:17:06,372
the rankings by clicking the follow button
above.
424
00:17:06,372 --> 00:17:07,019
This helps our podcast rank higher, which
brings more revenue to a show,
425
00:17:17,565 --> 00:17:19,964
and helps us bring in the very highest quality
guests and
426
00:17:19,964 --> 00:17:20,453
to produce the very highest
427
00:17:20,453 --> 00:17:20,459
quality content.
428
00:17:20,459 --> 00:17:20,473
Thank you for your support.
429
00:17:20,473 --> 00:17:20,516
There are a lot of entrepreneurs struggle from
that transition of this rock star salesperson
430
00:17:20,516 --> 00:17:20,774
to building an organization.
431
00:17:20,774 --> 00:17:21,274
So
432
00:17:30,329 --> 00:17:33,789
How did you scale your organization starting
from year 6, 7, onwards?
433
00:17:34,250 --> 00:17:34,890
And tell me
434
00:17:34,890 --> 00:17:34,916
about preserving the culture.
435
00:17:34,916 --> 00:17:35,029
And how are you able to scale FT partners and
not lose your edge in the marketplace?
436
00:17:35,029 --> 00:17:35,103
It was this mindset of we're we're not going to
grow
437
00:17:35,103 --> 00:17:35,869
at all unless we can get
438
00:17:44,714 --> 00:17:45,214
better.
439
00:17:45,275 --> 00:17:45,595
Right?
440
00:17:45,595 --> 00:17:49,115
I would way rather be a fifty person firm
offering amazing light service and
441
00:17:49,115 --> 00:17:49,171
making good money than a two 150 person firm
that's mediocre.
442
00:17:49,171 --> 00:17:49,228
And so it was all those groups that we built
out.
443
00:17:49,228 --> 00:17:59,639
So when I was younger and, you know, kinda
lording over every single element of every
444
00:17:59,639 --> 00:18:01,500
single deal in the early days.
445
00:18:01,639 --> 00:18:03,034
This is kind of in the 2003,456.
446
00:18:03,034 --> 00:18:03,519
I was doing a lot of things that I realized I
couldn't personally do
447
00:18:03,519 --> 00:18:03,693
at scale, and it was
448
00:18:03,693 --> 00:18:03,901
actually a part to get even
449
00:18:03,901 --> 00:18:04,789
individual bankers to do at scale.
450
00:18:11,775 --> 00:18:13,855
That's why we build out these, like, centers of
excellence.
451
00:18:13,855 --> 00:18:15,714
Like, for example, you know, we built up a
whole financial forensics and data science and
452
00:18:15,714 --> 00:18:15,761
due diligence team that is typically seen as
being used by the elite private equity firms to
453
00:18:15,761 --> 00:18:26,049
due diligence when they are buying multi like
our company.
454
00:18:26,049 --> 00:18:30,930
So we ended up hiring the very people that were
working for them and with them on our side of
455
00:18:30,930 --> 00:18:31,410
the equation.
456
00:18:31,410 --> 00:18:35,410
What we used to do is have junior analyst
associates from, you know, Harvard and Stanford
457
00:18:35,410 --> 00:18:38,849
that really cranking out the best models that
they could, and they were infinitely better
458
00:18:38,849 --> 00:18:40,390
than what the bigger banks were doing.
459
00:18:40,424 --> 00:18:41,785
But then we said, you know what?
460
00:18:41,785 --> 00:18:43,404
The buyers are getting more sophisticated.
461
00:18:43,545 --> 00:18:47,705
The investors and buyers in saying they I want
the whole data cube, and they want, like, 1000
462
00:18:47,705 --> 00:18:52,424
and 1000 of lines of data or millions of lines
of data and thousands of rows and columns and
463
00:18:52,424 --> 00:18:52,924
cube.
464
00:18:53,119 --> 00:18:54,640
And so, ultimately, that's
465
00:18:54,640 --> 00:18:54,694
impossible for a junior person isn't an expert
in data manipulation, and Excel just put blow
466
00:18:54,694 --> 00:18:54,708
up and break down.
467
00:18:54,708 --> 00:18:54,766
So, you know, we end up building a whole entire
group out of this using 3rd party
468
00:18:54,766 --> 00:18:59,619
sophisticated third party data analytics
platforms that can visualize things and use
469
00:19:08,894 --> 00:19:13,535
machine learning and AI to kinda get insights
out of the data that really tell the true story
470
00:19:13,535 --> 00:19:14,255
of a business.
471
00:19:14,255 --> 00:19:14,575
Right?
472
00:19:14,575 --> 00:19:18,174
And then we can even help companies change the
way they run their business, change the way
473
00:19:18,174 --> 00:19:18,894
they run their marketing.
474
00:19:18,894 --> 00:19:19,615
We do this every day.
475
00:19:19,615 --> 00:19:23,369
So we're actually operationally helping
companies change how they run their business,
476
00:19:23,369 --> 00:19:26,650
how they do marketing, how they do sales, how
they measure their salespeople, because we're
477
00:19:26,650 --> 00:19:27,930
seeing insights into the data.
478
00:19:27,930 --> 00:19:31,309
I met with the company the other day, and we
were analyzing their data.
479
00:19:31,450 --> 00:19:32,809
And we actually I'm up in Napa.
480
00:19:32,809 --> 00:19:34,170
I know we have this company up in Napa.
481
00:19:34,330 --> 00:19:35,450
I'll give him a bit of a plug.
482
00:19:35,450 --> 00:19:36,670
It's a company called LaVanta.
483
00:19:36,815 --> 00:19:38,595
Who, is growing like a weed.
484
00:19:38,654 --> 00:19:41,295
And, yeah, we were showing them their data in
every chart.
485
00:19:41,295 --> 00:19:42,894
They're like, holy shit.
486
00:19:42,894 --> 00:19:44,174
Like, that's amazing.
487
00:19:44,174 --> 00:19:46,894
Like, we didn't we knew we were crushing it,
but we didn't know we were crushing it that
488
00:19:46,894 --> 00:19:47,214
much.
489
00:19:47,214 --> 00:19:50,095
And then we show them another chart about
retention, another chart about net revenue
490
00:19:50,095 --> 00:19:54,240
retention, another chart about churn, another
chart about cross sell and and even these guys
491
00:19:54,240 --> 00:19:57,759
who we'd love, and they were just getting a lot
of value out of the data that we were showing
492
00:19:57,759 --> 00:19:59,919
them for their own business that they're
running every day.
493
00:19:59,919 --> 00:20:03,679
That kind of stuff, we couldn't even do that
when we were trying to be RTs, I don't know
494
00:20:03,679 --> 00:20:04,240
what I mean.
495
00:20:04,240 --> 00:20:07,934
Like, so but at scale, you can do that if you
have a centered excellence, right,
496
00:20:08,015 --> 00:20:09,215
you amortize that across
497
00:20:09,215 --> 00:20:09,455
the house.
498
00:20:09,455 --> 00:20:10,894
We don't charge any money from that.
499
00:20:10,894 --> 00:20:11,134
Right.
500
00:20:11,134 --> 00:20:11,455
Let's go.
501
00:20:11,455 --> 00:20:13,215
So people often say, and, you know, hey.
502
00:20:13,215 --> 00:20:16,674
You guys are we do probably charge a premium
price and get premium outcomes.
503
00:20:16,815 --> 00:20:22,029
But because you have very expensive people
doing a lot of hard work, that adds up to
504
00:20:22,029 --> 00:20:23,730
getting greater insights on a business.
505
00:20:23,789 --> 00:20:25,470
We do that, and no one else does that.
506
00:20:25,470 --> 00:20:25,710
Right?
507
00:20:25,710 --> 00:20:28,350
There's not a single investment bank on the
planet that's gonna sit
508
00:20:28,350 --> 00:20:28,509
here and talk
509
00:20:28,509 --> 00:20:30,750
about their data science team that works for
clients.
510
00:20:30,750 --> 00:20:31,730
It doesn't exist.
511
00:20:31,869 --> 00:20:37,335
How much of your unlocking of a company's value
has to do with framing the story and painting a
512
00:20:37,335 --> 00:20:38,055
bigger picture.
513
00:20:38,055 --> 00:20:41,735
And how much of it is it seems like you have a
lot of granularity when it comes to numbers and
514
00:20:41,735 --> 00:20:45,575
not painting a bigger picture per se, but
painting a much more accurate picture of the
515
00:20:45,575 --> 00:20:45,735
future.
516
00:20:45,735 --> 00:20:47,960
I mean, you're you're hitting on something that
crucial.
517
00:20:48,019 --> 00:20:51,299
You heard me talk about we have a mini
McKinsey, right, that's quite visionary in
518
00:20:51,299 --> 00:20:53,220
terms of telling stories and things like that.
519
00:20:53,220 --> 00:20:56,419
And, yeah, I'll give away a little bit of our
it's not secret sauce, but the way that we
520
00:20:56,419 --> 00:21:01,605
think about the world is we have a pitch page
that we described and very simple concept of
521
00:21:01,765 --> 00:21:03,936
investors look at a business and should look at
a
522
00:21:03,936 --> 00:21:04,016
business with a microscope, binoculars, and a
telescope, but you need different lenses and
523
00:21:04,016 --> 00:21:04,056
different tools and different types of people
524
00:21:04,056 --> 00:21:16,069
that are gonna engineer the microscopic look
the binocular luck or the telescopic look at a
525
00:21:16,069 --> 00:21:16,549
business.
526
00:21:16,549 --> 00:21:19,990
What a lot of people do is they try to they
actually don't do a good job of any of those
527
00:21:19,990 --> 00:21:20,789
things, quite frankly.
528
00:21:20,789 --> 00:21:23,109
You know, they they're giving my LTV to Cactus
X.
529
00:21:23,109 --> 00:21:23,269
Okay.
530
00:21:23,269 --> 00:21:24,069
But what does that mean?
531
00:21:24,069 --> 00:21:26,390
How do you calculate l and lifetime value?
532
00:21:26,390 --> 00:21:27,855
There's 87 ways to doing that?
533
00:21:27,855 --> 00:21:28,734
How do you do tackle?
534
00:21:28,734 --> 00:21:29,694
What about by channel?
535
00:21:29,694 --> 00:21:30,815
What about by cohort?
536
00:21:30,815 --> 00:21:32,015
What about by region?
537
00:21:32,015 --> 00:21:32,894
What about by product?
538
00:21:32,894 --> 00:21:33,775
How does the funnel work?
539
00:21:33,775 --> 00:21:34,914
How much of that's organic?
540
00:21:35,054 --> 00:21:41,289
You can drive an investor crazy by making them
ask a 1000 questions to get essentially the
541
00:21:41,289 --> 00:21:42,330
truth about a company.
542
00:21:42,330 --> 00:21:42,490
Right?
543
00:21:42,490 --> 00:21:44,890
What's the truth about the economics, the unit
economics?
544
00:21:44,890 --> 00:21:46,029
How's it working today?
545
00:21:46,330 --> 00:21:50,490
And then you look out the binoculars, which is
like, you know, call it, like, the 2, 3, 4, 5
546
00:21:50,490 --> 00:21:54,825
year view, and the the telescope is at 5 to 10
to 20 year view, depending on the business in
547
00:21:54,825 --> 00:21:56,605
what time frames make the most sense.
548
00:21:56,744 --> 00:22:00,664
So we try to do all that work and bring that
all into crystal clear focus.
549
00:22:00,664 --> 00:22:02,264
You know, you wanna see what we are today.
550
00:22:02,264 --> 00:22:06,424
Here's the micro v or the micro slide or
whatever it is, and and you can see the DNA of
551
00:22:06,424 --> 00:22:06,904
the company.
552
00:22:06,904 --> 00:22:07,224
Right?
553
00:22:07,224 --> 00:22:07,769
That's fine.
554
00:22:07,849 --> 00:22:12,170
But that's actually super helpful in trying to
see what's in the binoculars, right, out in the
555
00:22:12,170 --> 00:22:14,170
future because that you're kind of
extrapolating a little bit.
556
00:22:14,170 --> 00:22:17,710
And then if the company's projecting something
that is gonna off the, obviously,
557
00:22:17,769 --> 00:22:20,730
extrapolatable information, then they better be
good at explaining it.
558
00:22:20,730 --> 00:22:21,230
Right?
559
00:22:21,255 --> 00:22:25,494
And then, of course, the vision, it's a little
bit like impressionism, you know, like, you
560
00:22:25,494 --> 00:22:28,575
know, the Monet of the world where it's like, I
can kinda see what's going on there.
561
00:22:28,575 --> 00:22:32,615
I don't need to know with Ultra, exactly knife
precision, what that looks like.
562
00:22:32,615 --> 00:22:33,515
But, oh, okay.
563
00:22:33,820 --> 00:22:37,740
Take a revolute or a cloud walk where they
start in a niche product or a niche set of
564
00:22:37,740 --> 00:22:42,460
geographies, but they're really going to 90
geographies with with 20 products.
565
00:22:42,460 --> 00:22:44,240
And someone has to tell that story.
566
00:22:44,299 --> 00:22:44,619
Right?
567
00:22:44,619 --> 00:22:47,920
And that's kind of what we help people do when
we did the revolute deal in the $33,000,000,000
568
00:22:48,525 --> 00:22:52,290
valuation, which by the way is now proven to be
cheap, not expensive like everyone thought, you
569
00:22:52,290 --> 00:22:52,334
know, we build out the 20 year model, all the
different lines of business from personal lines
570
00:22:52,334 --> 00:22:52,615
to kind of consumer banking to business
banking, to payments, to payroll, pet
571
00:22:52,615 --> 00:23:03,920
insurance, you know, throughout, you know, all
these different geographies that we're able to
572
00:23:03,920 --> 00:23:07,680
sort of say, here's why we think this company
could be a $1,000,000,000 company.
573
00:23:07,680 --> 00:23:11,200
These guys didn't really get to be
50,000,000,000 in EBITDA.
574
00:23:11,200 --> 00:23:11,440
Right?
575
00:23:11,440 --> 00:23:13,860
And at that time, you know, that's a
$1,000,000,000,000,000 company.
576
00:23:13,984 --> 00:23:18,545
And so people got excited about it and wrote a
1,250,000,002,50 check when they were only
577
00:23:18,545 --> 00:23:19,845
really looking to raise 250,000,000.
578
00:23:20,465 --> 00:23:25,585
So when you raise a 1,250,000,000,250 at
33,000,000,000 versus, say, 250 at 10, that's
579
00:23:25,585 --> 00:23:30,569
an extra $1,000,000,000, and you're only taking
3 percent dilution You know, so that gonna
580
00:23:30,569 --> 00:23:32,809
change the whole entire trajectory of the
business.
581
00:23:32,809 --> 00:23:36,809
Now they've got gums of money to invest in
advertising and product that they wouldn't have
582
00:23:36,809 --> 00:23:38,490
had otherwise in a lot lower dilution.
583
00:23:38,490 --> 00:23:39,690
You know, that we were helping.
584
00:23:39,690 --> 00:23:41,805
We're really deep out on the microscopic side.
585
00:23:41,884 --> 00:23:45,085
And they had never built a 20 year product
vision or they had it in their head.
586
00:23:45,085 --> 00:23:47,805
I mean, these guys know it inherently, right,
but investors don't.
587
00:23:47,805 --> 00:23:48,924
And that's just to understand.
588
00:23:48,924 --> 00:23:52,924
Like, entrepreneurs think investors can very
quickly pick up on everything that they're
589
00:23:52,924 --> 00:23:56,539
they're thinking over the 5 years of history of
the company, but they can't.
590
00:23:56,539 --> 00:24:00,299
You know, I I always joke around and say
there's no magic, you know, Star Trek Vulcan
591
00:24:00,299 --> 00:24:03,259
thing where I can put my hand on your head and
my hand on the all the guys had to just
592
00:24:03,259 --> 00:24:04,639
transfer all that information.
593
00:24:04,700 --> 00:24:06,845
Like, it's gotta be done carefully.
594
00:24:06,904 --> 00:24:10,505
And and we think in writing, so we didn't write
it all down and give people the data.
595
00:24:10,505 --> 00:24:13,944
A lot of times people think what we do is,
like, some sort of, like, people joke around,
596
00:24:13,944 --> 00:24:16,984
like, you guys have some magical pills or
whatever, and you guys are creating magic.
597
00:24:16,984 --> 00:24:20,750
And we hear that all the time, but it's, like,
Man, if people knew how much hard work it was,
598
00:24:20,750 --> 00:24:22,109
nobody would wanna do it.
599
00:24:22,109 --> 00:24:26,990
The way that I look at it is to use an analogy
a company is like a plot of land on the beach,
600
00:24:26,990 --> 00:24:28,190
and there's gold underneath.
601
00:24:28,190 --> 00:24:31,470
And you could either do the hard work and use
the shovels to dig it up and show it to the
602
00:24:31,470 --> 00:24:31,970
investors.
603
00:24:32,284 --> 00:24:36,044
Or a very smart investor will come in, do a
bunch of work and figure out that that gold is
604
00:24:36,044 --> 00:24:36,284
there.
605
00:24:36,284 --> 00:24:37,964
And that's kind of where the alpha goes.
606
00:24:37,964 --> 00:24:41,484
It either goes to the investor to the company
or somewhere in between, like, a lot of great
607
00:24:41,484 --> 00:24:45,839
investors, great bankers are good at, covering
that and presenting it that people don't have
608
00:24:45,839 --> 00:24:46,960
to be geniuses to discover.
609
00:24:46,960 --> 00:24:47,279
And look,
610
00:24:47,279 --> 00:24:50,640
I mean, you're hitting on something that
reminds me of this myth out there that we hear
611
00:24:50,640 --> 00:24:52,000
a lot of CEOs will say, well, hey.
612
00:24:52,000 --> 00:24:53,140
Why do I need a banker?
613
00:24:53,200 --> 00:24:54,259
I can do it myself.
614
00:24:54,319 --> 00:24:58,305
Or my VCs tell me that if I have a banker, it
means I can't raise money.
615
00:24:58,384 --> 00:24:59,825
Is that true at any stage?
616
00:24:59,825 --> 00:25:00,545
Do you see that?
617
00:25:00,545 --> 00:25:04,585
Like, certainly there's there's negative
signals, series a or seed, or tell me about
618
00:25:04,585 --> 00:25:06,065
that, or is it different from fintech?
619
00:25:06,065 --> 00:25:07,585
I think it's it's a longer discussion.
620
00:25:07,585 --> 00:25:08,785
You can do a whole podcast on this.
621
00:25:08,785 --> 00:25:08,945
Right?
622
00:25:08,945 --> 00:25:14,099
And I think it'd be something that should be
kind of exposed a little bit where there's some
623
00:25:14,099 --> 00:25:19,059
truth to everything, right, but there's also a
lot of, I think, falseness to those kind of
624
00:25:19,059 --> 00:25:19,299
statements.
625
00:25:19,299 --> 00:25:21,640
And I'll I'll give I'll give you my little
speech on this.
626
00:25:21,779 --> 00:25:25,714
I'd say there's a lot of companies there really
do have a lot of hard time raising money, and
627
00:25:25,714 --> 00:25:27,554
they talk to 50, 75 investors.
628
00:25:27,554 --> 00:25:28,615
They can't raise it.
629
00:25:28,674 --> 00:25:30,035
And then they need help.
630
00:25:30,035 --> 00:25:33,815
They need to find a banker that needs to go to
help them raise the capital.
631
00:25:34,035 --> 00:25:36,755
And those are not our clients, but there's a
lot out there like that.
632
00:25:36,755 --> 00:25:39,960
And so if the banker takes on that business and
then goes in shops at the Sequoia
633
00:25:39,960 --> 00:25:40,109
and Cliner and a 16z and TCV and, you know,
whoever else, there's a
634
00:25:40,109 --> 00:25:40,227
pattern recognition there that they're seeing a
lot of deals from
635
00:25:40,227 --> 00:25:40,769
bankers that aren't that good.
636
00:25:41,150 --> 00:25:41,650
Right?
637
00:25:49,414 --> 00:25:50,855
So there there's that element of it.
638
00:25:50,855 --> 00:25:50,934
Right?
639
00:25:50,934 --> 00:25:51,660
And and and that could be true.
640
00:25:51,660 --> 00:25:51,696
But it doesn't mean that when I show up on your
doorstep with Revolute, that Revolute isn't a
641
00:25:51,696 --> 00:25:51,714
super high quality company because they have a
banker.
642
00:25:51,714 --> 00:25:51,716
Right?
643
00:25:51,716 --> 00:25:51,719
Yeah.
644
00:25:51,719 --> 00:26:03,359
Revolute's the best company in the world, and
they chose who, FTE partners.
645
00:26:03,359 --> 00:26:03,759
Right?
646
00:26:03,759 --> 00:26:04,515
You look at OpenAI's founder, Sam Altman.
647
00:26:04,515 --> 00:26:04,577
He has another company called World Coin.
648
00:26:04,577 --> 00:26:04,648
Well, Sam Altman, the person involved in hiring
649
00:26:04,648 --> 00:26:04,684
us on World Coin.
650
00:26:04,684 --> 00:26:04,693
Right?
651
00:26:04,693 --> 00:26:04,737
We raised money for Worldcoin.
652
00:26:04,737 --> 00:26:04,764
It's not like
653
00:26:04,764 --> 00:26:18,544
Sam Altman's a guy that needs help raising
capital, but sometimes having someone there
654
00:26:18,544 --> 00:26:20,065
that helps you is not a bad thing.
655
00:26:20,065 --> 00:26:20,068
Right?
656
00:26:20,068 --> 00:26:20,126
And one of our clients in Brazil, sidewalk, I
mean, everyone wants their best in that
657
00:26:20,126 --> 00:26:20,163
company, but, you know, we've been their banker
for years.
658
00:26:20,163 --> 00:26:20,170
They keep
659
00:26:20,170 --> 00:26:20,177
us around.
660
00:26:20,177 --> 00:26:20,474
We've done a great job for those guys, and
they're growing like a weed.
661
00:26:20,474 --> 00:26:33,454
So I think there's some of the most elite
companies have bankers, and that's a great
662
00:26:33,454 --> 00:26:33,459
thing as well.
663
00:26:33,459 --> 00:26:33,482
But I think a lot of investors are scared of
bankers on good companies.
664
00:26:33,482 --> 00:26:33,515
And so they try to scare the CEO by saying, you
don't wanna be like one of these bad companies
665
00:26:33,515 --> 00:26:33,521
with these dumb bankers.
666
00:26:33,521 --> 00:26:34,190
You just do it on your own.
667
00:26:44,765 --> 00:26:49,805
Well, what CEO who was maybe never a banker,
never raised any money spends all their time
668
00:26:49,805 --> 00:26:54,640
running their company is just so perfectly
naturally acclimated to knowing every VC in the
669
00:26:54,640 --> 00:26:58,139
valley and knowing exactly how to value their
company and probably 0, honestly.
670
00:26:58,139 --> 00:26:58,144
Right?
671
00:26:58,144 --> 00:26:58,209
Everyone could use a banker, whether you're a
okay company, a good company, great company, or
672
00:26:58,209 --> 00:26:58,221
an amazing company.
673
00:26:58,221 --> 00:26:58,234
We've proven it.
674
00:26:58,234 --> 00:26:58,262
Chef partners has such a good filtering
675
00:26:58,262 --> 00:27:09,565
and screening that if you got FD partners as
your banker, then you
676
00:27:09,565 --> 00:27:09,582
must be a good company.
677
00:27:09,582 --> 00:27:09,600
So it's the opposite signal.
678
00:27:09,600 --> 00:27:09,603
Right?
679
00:27:09,603 --> 00:27:09,635
And that's kind of what we try to create.
680
00:27:09,635 --> 00:27:09,688
That's why we have a huge filter, and we're
actually turning down lots of deals.
681
00:27:09,688 --> 00:27:09,741
I asked you when we last chatted whether PayPal
was sold at the right price.
682
00:27:09,741 --> 00:27:09,790
And you said you would have sold it for 5 or
$10,000,000,000,000, not the
683
00:27:09,790 --> 00:27:11,505
one billion that was sold for
684
00:27:24,919 --> 00:27:27,319
Tell me about how you would have gone about
selling PayPal.
685
00:27:27,319 --> 00:27:27,480
Yeah.
686
00:27:27,480 --> 00:27:31,000
You kinda could look at the future and say,
well, what should have happened in the past?
687
00:27:31,000 --> 00:27:31,500
Right?
688
00:27:31,559 --> 00:27:35,723
So if you look at PayPal and and PayPal's been
kind of up and down, all that kind of stuff,
689
00:27:35,723 --> 00:27:37,979
but, like, at the end of the day, let's just
say it was sold for 1,000,000,000.
690
00:27:37,979 --> 00:27:39,579
It was generally worth a
100,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000
691
00:27:39,964 --> 00:27:40,655
long term, even though it was at 1 point worth
200,000,000,000, maybe it's worth 75 now,
692
00:27:40,655 --> 00:27:40,669
whatever, but it went from 1 to a
100,000,000,000 in a 3, you know, 20 year
693
00:27:40,669 --> 00:27:40,672
period of time.
694
00:27:40,672 --> 00:27:40,673
Right?
695
00:27:40,673 --> 00:27:40,684
And you take another company, which was
massively undersold, which was Mastercard.
696
00:27:40,684 --> 00:27:40,684
Right?
697
00:27:40,684 --> 00:27:57,679
People forget At the IPO of Mastercard, you can
Google it right now, folks.
698
00:27:57,679 --> 00:27:58,115
What was Mastercard's IPO value?
699
00:27:58,115 --> 00:27:58,257
It was, like, 5, 6, or $7,000,000,000 less than
20 years later.
700
00:27:58,257 --> 00:27:58,316
So that was in 2007.
701
00:27:58,316 --> 00:27:59,149
In 2024, their market cap's, like, 5 or
$600,000,000,000.
702
00:28:08,164 --> 00:28:12,649
So why was it only worth 5,000,000,000 then
when it's processing half the transactions
703
00:28:12,649 --> 00:28:12,683
on the planet including Mastercard and Visa?
704
00:28:12,683 --> 00:28:12,712
Well, it was a private company.
705
00:28:12,712 --> 00:28:12,756
It was thought while it was run as an
706
00:28:12,756 --> 00:28:12,770
association of banks.
707
00:28:12,770 --> 00:28:13,464
People didn't really know exactly how to price
it.
708
00:28:20,830 --> 00:28:21,981
So they priced it 5, 6, 7,000,000,000, whatever
it was.
709
00:28:21,981 --> 00:28:22,035
The IPO, they sold half the company.
710
00:28:22,035 --> 00:28:22,043
Right?
711
00:28:22,043 --> 00:28:22,082
So a bunch of T.
712
00:28:22,082 --> 00:28:22,184
Rowe prices and fatalities and everybody else
who all made $250,000,000,000 on their
713
00:28:22,184 --> 00:28:22,199
investment and
714
00:28:22,199 --> 00:28:22,262
was one of the worst transactions in history.
715
00:28:22,262 --> 00:28:36,984
That being said, every banker on the street
says I
716
00:28:36,984 --> 00:28:37,005
worked on a Mastercard transaction.
717
00:28:37,005 --> 00:28:37,025
I'm super proud of myself.
718
00:28:37,025 --> 00:28:37,028
Right?
719
00:28:37,028 --> 00:28:37,037
Oh, yeah.
720
00:28:37,037 --> 00:28:37,085
You worked on, like, the one of the worst price
transaction
721
00:28:37,085 --> 00:28:37,096
in the history.
722
00:28:37,096 --> 00:28:37,108
PayPal's another one.
723
00:28:37,108 --> 00:28:37,113
Right?
724
00:28:37,113 --> 00:28:37,132
I mean, again, it's hindsight.
725
00:28:37,132 --> 00:28:37,141
It's 2020.
726
00:28:37,141 --> 00:28:37,184
So you gotta take this all with a grain of
salt.
727
00:28:37,184 --> 00:28:37,189
Right?
728
00:28:37,189 --> 00:28:37,196
But you
729
00:28:37,196 --> 00:28:37,209
look at PayPal.
730
00:28:37,209 --> 00:28:52,230
And, again, the joke is like, You have to
paypal mafia.
731
00:28:52,230 --> 00:28:54,070
There's people that were remembered from the
great things they
732
00:28:54,070 --> 00:28:54,137
did to PayPal, Elon Musk, and so on and so
forth.
733
00:28:54,137 --> 00:28:54,143
Right?
734
00:28:54,143 --> 00:28:54,180
But they raised 100 of 1,000,000,000
735
00:28:54,180 --> 00:28:54,285
of dollars, raised money in an IPO, and they
really only sold the company for, like, a
736
00:28:54,285 --> 00:28:54,630
1,200,000,000 or something like that.
737
00:28:54,630 --> 00:28:55,130
Right?
738
00:29:04,065 --> 00:29:04,865
So it's like, it
739
00:29:04,865 --> 00:29:04,900
wasn't like that much economic value created.
740
00:29:04,900 --> 00:29:04,990
I mean, it was enough to get a Elon on a
hundred million bucks to go start these
741
00:29:04,990 --> 00:29:04,994
companies.
742
00:29:04,994 --> 00:29:05,054
It wasn't like this thing was, like, recs or
Stripe or something.
743
00:29:05,054 --> 00:29:05,079
It wasn't really recognized for
744
00:29:05,079 --> 00:29:05,095
what it was.
745
00:29:05,095 --> 00:29:05,099
Right?
746
00:29:05,099 --> 00:29:05,184
You could also argue that it was actually a
great company, but it wasn't a great process.
747
00:29:05,184 --> 00:29:05,934
Of course.
748
00:29:19,710 --> 00:29:23,614
Perhaps you could have come in and sold her for
5,000,000,000, which in today's dollars,
749
00:29:23,614 --> 00:29:26,217
today's tech M and A dollars would be, like,
50,000,000,000.
750
00:29:26,217 --> 00:29:30,902
So it goes to show the inflection point of a
sale, how much that could affect the financial
751
00:29:30,902 --> 00:29:31,163
outcome.
752
00:29:31,163 --> 00:29:31,423
Yeah.
753
00:29:31,423 --> 00:29:33,080
I mean, also, even think about PayPal was one
of the primary ways to pay on eBay.
754
00:29:33,080 --> 00:29:33,095
And eBay, remember, eBay is the one that bought
it.
755
00:29:33,095 --> 00:29:33,099
EBay bought PayPal.
756
00:29:33,099 --> 00:29:33,115
They since spun it off and all that kind of
stuff.
757
00:29:33,115 --> 00:29:33,140
But, like, and at that moment in time, eBay was
the primary marketplace for SMBs and for people
758
00:29:33,140 --> 00:29:33,545
to sell things online.
759
00:29:33,545 --> 00:29:34,045
Right?
760
00:29:46,950 --> 00:29:49,198
S and Bs or or human beings or, you know,
individuals, consumers, whatever.
761
00:29:49,198 --> 00:29:49,206
And because
762
00:29:49,206 --> 00:29:49,282
it was a primary place, like, everyone in 1999
that was on the internet had an eBay account,
763
00:29:49,282 --> 00:29:49,324
right, so you had, like, every single consumer
has an
764
00:29:49,324 --> 00:29:50,089
account, and every single seller has an
account.
765
00:30:00,005 --> 00:30:03,136
And so if you were to find and own the payment
method to
766
00:30:03,136 --> 00:30:03,206
connect all those people, you've gotta close
that work, a closed loop.
767
00:30:03,206 --> 00:30:03,253
And you'd have millions of sellers and millions
768
00:30:03,253 --> 00:30:03,347
of buyers, then it wouldn't be that hard to
deduce that that could become ubiquitous around
769
00:30:03,347 --> 00:30:14,950
the world, which is kinda Right?
770
00:30:14,950 --> 00:30:19,590
Well, that story wasn't clearly told because a
public company probably covered by 10 twelve
771
00:30:19,590 --> 00:30:20,630
research analysts at the time.
772
00:30:20,630 --> 00:30:23,110
So all estimates for what they were gonna make
next year.
773
00:30:23,110 --> 00:30:27,029
And at that time, they probably weren't gonna
make that much money the next year, they ended
774
00:30:27,029 --> 00:30:28,070
up selling it for $1,000,000,000.
775
00:30:28,070 --> 00:30:30,674
So Could I have sold it for 2, 3, 4, 5, 10?
776
00:30:30,674 --> 00:30:31,234
Who knows?
777
00:30:31,234 --> 00:30:31,315
Right?
778
00:30:31,315 --> 00:30:36,515
An article going back to 2021 that you say that
said that you still work nights weekends at
779
00:30:36,515 --> 00:30:40,275
your age, and I I know you're also very proud
to be a father, and that's been a big war in
780
00:30:40,275 --> 00:30:42,049
your life talk to me about work life balance.
781
00:30:42,049 --> 00:30:43,009
Does it even exist?
782
00:30:43,009 --> 00:30:45,190
How do you make that trade off personally
versus professionally?
783
00:30:45,490 --> 00:30:47,250
It's it's become work, kid balance.
784
00:30:47,250 --> 00:30:48,289
There's no life really.
785
00:30:48,369 --> 00:30:50,369
I'm kidding because the kids stuff is is life.
786
00:30:50,369 --> 00:30:54,289
And so, you know, look, I I went a long time
without a wiper kids, and I was able to work
787
00:30:54,289 --> 00:30:56,070
247, and that was great.
788
00:30:56,085 --> 00:31:00,244
I always knew I'd get married and hope to have
kids, and I've got 2 amazing kids and and
789
00:31:00,244 --> 00:31:01,365
actually one on the way.
790
00:31:01,365 --> 00:31:05,605
So, I'll be, three under three and a half, end
of the year, hopefully.
791
00:31:05,605 --> 00:31:08,244
And I'm the most happiest proudest dad in the
world.
792
00:31:08,244 --> 00:31:11,819
But that whole question you asked about with
the 2nd decade of building up the firm, We
793
00:31:11,819 --> 00:31:14,380
build up an amazing company with amazing
people.
794
00:31:14,380 --> 00:31:19,259
And in order to scale the business, I now sort
of co run a lot of the transactions, like co
795
00:31:19,259 --> 00:31:23,720
lead, a lot of the teams that we have, and I
don't have to do every little thing, every
796
00:31:23,720 --> 00:31:27,565
little task, kind of, reveal, And, you know,
we, we build a district great teams.
797
00:31:27,565 --> 00:31:31,085
I think it's really, really important for all
my employees that have lives outside of the
798
00:31:31,085 --> 00:31:35,404
officer partners and husbands and wives and
kids to to spend time with them, and and we
799
00:31:35,404 --> 00:31:36,525
really do encourage that.
800
00:31:36,525 --> 00:31:38,789
We have won MDs on months of out.
801
00:31:38,789 --> 00:31:42,470
But right now, spending time with his family,
you have all the associates, a month off to
802
00:31:42,470 --> 00:31:44,170
spend time with their families and friends.
803
00:31:44,309 --> 00:31:45,750
So that's it's really, really important.
804
00:31:45,750 --> 00:31:49,190
And it's one of the reason we scale the firm up
so much because we wanna have some flex time
805
00:31:49,190 --> 00:31:53,215
for people, including myself, and I really
think it'll be a a sin to really be a work on
806
00:31:53,215 --> 00:31:53,455
it.
807
00:31:53,455 --> 00:31:54,914
Do you have issues taking time?
808
00:31:55,055 --> 00:31:55,295
No.
809
00:31:55,295 --> 00:31:55,375
I
810
00:31:55,375 --> 00:32:00,734
mean, you know, I I would have more of an issue
going golfing every weekend for 8 hours with
811
00:32:00,734 --> 00:32:01,055
the guys.
812
00:32:01,055 --> 00:32:01,615
You know what I mean?
813
00:32:01,615 --> 00:32:02,414
Like, I don't do that.
814
00:32:02,414 --> 00:32:06,970
When I wake up on Saturday at 6 o'clock in the
morning, I run, like, a child running to a
815
00:32:06,970 --> 00:32:10,569
Christmas tree to wake up my kids, you know,
just super dedicated and super excited about
816
00:32:10,569 --> 00:32:11,450
them every day.
817
00:32:11,450 --> 00:32:15,210
And so I cherish all the moments I have with
them and but, also, they need to see dad
818
00:32:15,210 --> 00:32:15,529
working.
819
00:32:15,529 --> 00:32:17,049
So dad works his ass off.
820
00:32:17,049 --> 00:32:21,054
And my three year old knows what work is He
knows what Zoom is.
821
00:32:21,054 --> 00:32:22,414
He knows what a business is.
822
00:32:22,414 --> 00:32:26,734
He knows what money is, and he knows what toys
are and birds and and things too.
823
00:32:26,734 --> 00:32:30,414
But, you know, he knows, you know, every day we
wake up and first thing out of his mouth is the
824
00:32:30,414 --> 00:32:31,234
seas today.
825
00:32:31,294 --> 00:32:36,269
So I'm gonna try to raise him and my daughter
is, like, hardworking individuals and not
826
00:32:36,269 --> 00:32:38,269
entitled kids and all this kind of stuff.
827
00:32:38,269 --> 00:32:41,069
So I think that work and home life can be mixed
really, really well.
828
00:32:41,069 --> 00:32:44,429
And but I think you really gotta raise your
kids and be there for them.
829
00:32:44,429 --> 00:32:47,585
Even a client centered business, How important
are in persons?
830
00:32:47,585 --> 00:32:48,384
What's your cadence?
831
00:32:48,384 --> 00:32:50,144
Tell me about zoom versus in person.
832
00:32:50,144 --> 00:32:51,825
It's gotta be a strong mix of both.
833
00:32:51,825 --> 00:32:56,464
I mean, we don't kick off a project, you know,
without trying to do something face to face.
834
00:32:56,464 --> 00:32:58,304
And some of that's work stuff face to face.
835
00:32:58,304 --> 00:33:02,889
Some some some spot I mentioned that company
earlier Lavanta that we invited out to Napa.
836
00:33:02,889 --> 00:33:06,649
We had a big work day, and then we had some
wine tasting and yucked it up a little bit and
837
00:33:06,649 --> 00:33:07,289
got to know them.
838
00:33:07,289 --> 00:33:12,730
And so I think for us, it's just great to be
able to mix a lot of fun and FaceTime just
839
00:33:12,730 --> 00:33:14,055
getting together face to face.
840
00:33:14,055 --> 00:33:18,134
And one of the things that I do is try to get
in front of the clients all the time because,
841
00:33:18,134 --> 00:33:20,375
you know, that's also a great time to spend
time with your employees.
842
00:33:20,375 --> 00:33:20,535
Right?
843
00:33:20,535 --> 00:33:22,428
You know, I mean, you know, the office and
everyone's running around.
844
00:33:22,428 --> 00:33:22,975
That's one thing.
845
00:33:22,975 --> 00:33:27,669
But when you're on location in Austin with a
client for a day, Well, maybe we might take 3
846
00:33:27,669 --> 00:33:31,109
or 4 hours as the team and go grab dinner or
drink sweaters sometime with the team too.
847
00:33:31,109 --> 00:33:33,829
So it's not just Zoom with your clients and
Zoom team too.
848
00:33:33,829 --> 00:33:36,389
You've mentioned that you've really evolved
your business.
849
00:33:36,389 --> 00:33:41,025
What do you focus on doing now yourself Steve
McLaughlin versus what do you farm out to other
850
00:33:41,025 --> 00:33:42,325
people with different competencies?
851
00:33:42,704 --> 00:33:46,945
A lot of its teamwork as opposed to just
farming this out or farming that out, certainly
852
00:33:46,945 --> 00:33:47,851
accounting, finance, taxes, ops, engineering.
853
00:33:47,851 --> 00:33:47,984
I mean, we have all
854
00:33:47,984 --> 00:33:48,091
those functions of the
855
00:33:48,091 --> 00:33:57,160
company, but we have an amazing CFO legal
people, C OL type people, like, running all
856
00:33:57,160 --> 00:33:58,140
those kind of things.
857
00:33:58,279 --> 00:34:01,640
I'm very, very client centric, right, and team
centric.
858
00:34:01,640 --> 00:34:05,490
So it's my job is to make sure we bring in the
right people that we treat the clients right
859
00:34:05,490 --> 00:34:07,734
and that we give the clients the right
attention.
860
00:34:07,734 --> 00:34:11,175
And so I think that is my best and highest use.
861
00:34:11,175 --> 00:34:12,643
And I think where I spent a little bit of time
is thinking strategically about the firm where
862
00:34:12,643 --> 00:34:12,652
are we going?
863
00:34:12,652 --> 00:34:12,669
All these groups that we developed.
864
00:34:12,669 --> 00:34:12,675
It's funny.
865
00:34:12,675 --> 00:34:21,619
I just had a conversation with one of our
Junior guys today, Axel, I talked to him this
866
00:34:21,619 --> 00:34:21,940
morning.
867
00:34:21,940 --> 00:34:25,380
As I kind of talked about him and motivating
him and saying, look, look, and all jobs are
868
00:34:25,380 --> 00:34:27,699
99% 1st regional, 1% inspiration.
869
00:34:27,699 --> 00:34:30,420
So, like, a lot of it's grinding, grinding,
grinding, but your brain has to be working
870
00:34:30,420 --> 00:34:31,699
about what should I be doing differently?
871
00:34:31,699 --> 00:34:32,819
How should I grow the business?
872
00:34:32,819 --> 00:34:35,885
You know, how should I shoot my people,
actually, run the company.
873
00:34:35,885 --> 00:34:39,565
And so I spend a little bit of time every day
thinking about that kind of something, but then
874
00:34:39,565 --> 00:34:41,085
we have good people that can go execute.
875
00:34:41,085 --> 00:34:43,965
Now we don't have, like, mid level kids writing
our data science team.
876
00:34:43,965 --> 00:34:47,724
We have a guy that's been running financial
forensics and data science stuff for 20 years.
877
00:34:47,724 --> 00:34:48,784
She has a way of adults.
878
00:34:48,869 --> 00:34:50,869
You know, running all of our key parts of the
firm.
879
00:34:50,869 --> 00:34:55,349
We've got a master engineer engineering team
building up our our tech platform.
880
00:34:55,349 --> 00:34:57,190
So you just have to really, really good people.
881
00:34:57,190 --> 00:35:00,789
So I can spend my time on the things that
matter, which is the people and the clients.
882
00:35:00,789 --> 00:35:02,230
You mentioned the people and the clients.
883
00:35:02,230 --> 00:35:04,105
What percentage of time do you get to on that?
884
00:35:04,105 --> 00:35:04,925
Is that 20%?
885
00:35:05,144 --> 00:35:05,965
Is that 60%?
886
00:35:06,105 --> 00:35:08,204
And what percentage of time does it take up
today?
887
00:35:08,425 --> 00:35:12,265
I it's it takes up the large, large, large
majority of my time, you know, and most of
888
00:35:12,265 --> 00:35:12,905
that's on it.
889
00:35:12,905 --> 00:35:15,644
All the operational stuff is all been farmed
out.
890
00:35:15,704 --> 00:35:17,545
And that's been the most amazing thing.
891
00:35:17,545 --> 00:35:20,819
It's like when I farm something out to the
right people, they blossom.
892
00:35:20,880 --> 00:35:23,519
I mean, I'm learning things all the time that
our teams are doing.
893
00:35:23,519 --> 00:35:24,719
And I'm like, we're doing that.
894
00:35:24,719 --> 00:35:25,519
We're doing that.
895
00:35:25,519 --> 00:35:27,440
Like, collection applied our whole finance
department.
896
00:35:27,440 --> 00:35:31,679
You know, it's all paperless and perfect and of
the data science tools that the team is buying
897
00:35:31,679 --> 00:35:35,824
and building and designing and integrating into
our FT base API into our client systems.
898
00:35:35,824 --> 00:35:37,444
I mean, stuff I never even thought.
899
00:35:37,585 --> 00:35:38,464
I would never think of that.
900
00:35:38,464 --> 00:35:42,224
I think it was jobs or somebody said, you know,
let's not hire smart people to tell them what
901
00:35:42,224 --> 00:35:42,385
to do.
902
00:35:42,385 --> 00:35:44,545
Let's hire smart people to tell us what to do.
903
00:35:44,545 --> 00:35:46,784
And that is an important mentality to have.
904
00:35:46,784 --> 00:35:52,239
So I'm really smart, hardworking driven, people
that are driving the company forward again.
905
00:35:52,380 --> 00:35:54,059
And I just like working with
906
00:35:54,059 --> 00:35:54,123
clients and building the team, so that's where
I spend almost all my time.
907
00:35:54,123 --> 00:35:54,132
That's great.
908
00:35:54,132 --> 00:35:54,164
I could learn a lot from that.
909
00:35:54,164 --> 00:35:54,192
Thanks for jumping on the podcast.
910
00:35:54,192 --> 00:35:54,719
When it comes to FD Partners and
911
00:36:02,699 --> 00:36:05,405
yourself, What would you like to shine a light
on for our listeners?
912
00:36:05,704 --> 00:36:08,585
I'd say number 1, like, you heard me talk a lot
about the team today.
913
00:36:08,585 --> 00:36:12,345
We've got an amazing incredible team of people
that have been here a long time who work very
914
00:36:12,345 --> 00:36:12,825
hard.
915
00:36:12,825 --> 00:36:14,345
The families they're sacrificing for.
916
00:36:14,345 --> 00:36:19,260
And and we're here to build something for us,
but also to do great work for our clients.
917
00:36:19,260 --> 00:36:22,400
So we're here to do amazing, amazing work with
the clients.
918
00:36:22,619 --> 00:36:26,299
And thank you all for the work you do, and
thank our clients for for hiring us and
919
00:36:26,299 --> 00:36:28,329
trusting us with your, you know, $1,000,000,000
babies.
920
00:36:28,715 --> 00:36:31,994
The world of FinTech is something that's near
dear to all of us.
921
00:36:31,994 --> 00:36:33,994
I think FinTech is doing good for the world.
922
00:36:33,994 --> 00:36:36,914
And, you know, we only wanna work for the
companies that are doing good for the world in
923
00:36:36,954 --> 00:36:38,494
of FinTech and Financial Services.
924
00:36:38,795 --> 00:36:41,994
So, you know, there's a real mission behind
everything that we're doing, which is try to
925
00:36:41,994 --> 00:36:44,980
really help entrepreneurs succeed with their
dreams and make things better.
926
00:36:44,980 --> 00:36:48,819
It actually makes me feel good that Nick
Stronsky's killing it at revolut because he's
927
00:36:48,819 --> 00:36:52,900
actually on a complete and utter mission to
just bring down price and increase quality of
928
00:36:52,900 --> 00:36:57,005
products for the world and financial services,
and I think he can do yeah, the stuff that the
929
00:36:57,005 --> 00:36:58,925
world going guys are doing under Sam Altman.
930
00:36:58,925 --> 00:37:02,684
And so we try to find these companies that are
doing good, and that that makes us, I think,
931
00:37:02,684 --> 00:37:03,805
perform better and do better.
932
00:37:03,805 --> 00:37:08,204
And so it's a little warm and fuzzy way to end,
but, we're very lucky to be in the position
933
00:37:08,204 --> 00:37:11,730
we're in in the geographies and the countries
and the state of the economy that we're in
934
00:37:11,730 --> 00:37:16,050
thankful for everything that's gone on well for
us and look forward to another 20, 30, 40 years
935
00:37:16,050 --> 00:37:16,449
ahead.
936
00:37:16,449 --> 00:37:16,949
Absolutely.
937
00:37:17,010 --> 00:37:20,609
Well, I'm looking forward to finally sitting
down in person as well and, special shout out
938
00:37:20,609 --> 00:37:22,530
to WorldCOIN, one of our portfolio companies as
well.
939
00:37:22,530 --> 00:37:23,170
There you go.
940
00:37:23,170 --> 00:37:23,489
There you
941
00:37:23,489 --> 00:37:23,840
go.
942
00:37:23,921 --> 00:37:24,561
Alright, David.
943
00:37:24,561 --> 00:37:25,300
Thank you.
944
00:37:26,481 --> 00:37:30,581
For more ideas on how to raise venture capital
in this market, make sure to subscribe below.
